Green Giant: Beijings crash program for clean energy.

China introduces yet another new law to boost renewable energy.

“China is going to eat our lunch and take our jobs on clean energy “” an industry that we largely invented “” and they are going to do it with a managed economy we don’t have and don’t want,” as I’ve said. Our only chance of matching them is to pass the bipartisan climate and clean energy bill.

Two new articles underscore America’s challenge. The first is a short Reuters piece on China’s new renewables law, and the second is a long New Yorkerpiece. Reuters reported Sunday:

A new Chinese law requires power grid operators to buy all the electricity produced by renewable energy generators, in a move that will increase the proportion of energy that comes from renewable sources in coal-dependent China.

The amendment to the 2006 renewable energy law was adopted on Saturday by the standing committee of the National People’s Congress, China’s legislature, the Xinhua news agency said.

The amendment also gives authority to the State Council energy department, together with the State Council finance department and the state power authority, to “determine the proportion of renewable energy power generation to the overall generating capacity for a certain period.”

The New Yorker piece is great news from the perspective of those who want to see widespread dissemination of low-cost low-carbon technology, but alarming to any American who understands that such technology will be the among the biggest source of high-wage jobs and economic power this century (see “Invented here, sold there”). I recommend reading the whole piece, but I’ll single out two must-read extended excerpts. First, the overview:

In 2006, Chinese leaders redoubled their commitment to new energy technology; they boosted funding for research and set targets for installing wind turbines, solar panels, hydroelectric dams, and other renewable sources of energy that were higher than goals in the United States. China doubled its wind-power capacity that year, then doubled it again the next year, and the year after. The country had virtually no solar industry in 2003; five years later, it was manufacturing more solar cells than any other country, winning customers from foreign companies that had invented the technology in the first place. As President Hu Jintao, a political heir of Deng Xiaoping, put it in October of this year, China must “seize pre«mptive opportunities in the new round of the global energy revolution.”

So China’s leaders are committed to aggressive government policies that will ensure their leadership in clean energy. Sadly, in this country, such vision is shared only by progressive political leaders and a very few conservatives, such as Sen. Lindsey Graham (R-SC) who said this month:

“I believe the green economy is coming. That’s not a question of if it’s going to happen, it’s just when it’s going to happen. The sooner the better for me, because the jobs of the future lie in energy independence and cleaning up the environment.”

In the same way, technology that is too expensive to be profitable in the West can become economical once China is involved; DVD players and flat-screen televisions were luxury goods until Chinese low-cost production made them ubiquitous. So far, many of the most promising energy technologies””from thin-film solar cells to complex systems that store carbon in depleted oil wells””are luxury goods, but the combination of Chinese manufacturing and American innovation is powerful; Kevin Czinger, a former Goldman Sachs executive, called it “the Apple model.” “Own the brand, the design, and the intellectual property,” he said, and then go to whoever can manufacture the technology reliably and cheaply. A few years ago, Czinger began looking at the business of electric cars. Detroit was going to move slowly, he figured, to avoid undermining its main business, and U.S. startups, including Tesla and Fisker, were planning to sell luxury electric cars for more than eighty thousand dollars each. Czinger had something else in mind.

“These cars should be far simpler and far cheaper than anything that’s manufactured today,” he told me when we met last spring in Beijing. At fifty, Czinger has brown hair swept back, sharp cheekbones, and an intensity that borders on the unnerving. (“Kevin Czinger was the toughest kid to play football at Yale in my thirty-two years as head coach,” Carm Cozza, the former Yale coach, wrote in a memoir. “He was also the most unusual personality, probably the outstanding overachiever, maybe the brightest student, and definitely the scariest individual.”)

In the spring of 2008, Czinger signed on as the C.E.O. of Miles Electric Vehicles, a small electric-car company in Santa Monica that was looking to expand, and he went searching for a Chinese partner. He ended up at Tianjin Lishen Battery Joint-Stock Company. A decade ago, Japan dominated the world of lithium-ion batteries””the powerful, lightweight cells that hold promise for an electric-car future””but in 1998 the Chinese government launched a push to catch up. Lishen received millions in subsidies and hundreds of acres of low-cost land to build a factory. The company grew to two hundred and fifty million dollars in annual sales, with customers including Apple, Samsung, and Motorola. Last year, the 863 Program gave Lishen a $2.6-million grant to get into the electric-car business. That is when Czinger showed up. “We hit it off immediately,” Qin Xingcai, the general manager of Lishen, said.

Czinger, who by now was heading up a sister company called Coda Automotive, added components from America and Germany and a chassis licensed from Japan. If all goes as planned, the Coda will become the first mass-produced all-electric sedan for sale in the United States next fall, with a price tag, after government rebates, of about thirty-two thousand dollars. The Coda looks normal to the point of banal, a Toyota-ish family car indistinguishable from anything you would find in a suburban cul-de-sac. And that’s the point; its tagline, “A model for the mainstream,” is a jab at more eccentric and expensive alternatives.

The race to make the first successful electric car may hinge on what engineers call “the pack”””the intricate bundle of batteries that is the most temperamental equipment on board. If the pack is too big, the car will be too pricey; if the pack is too small, or of poor design, it will drive like a golf cart. “Batteries are a lot like people,” Phil Gow, Coda’s chief battery engineer, told me when I visited the Tianjin factory, a ninety-minute drive from Beijing. “They want to have a certain temperature range. They’re finicky.” To explain, Gow, a Canadian, who is bald and has a goatee, led me to one of Lishen’s production lines, similar to the car-battery line that will be fully operational next year. Workers in blue uniforms and blue hairnets were moving in swift precision around long temperature-controlled assembly lines, sealed off from dust and contamination by glass walls.

The workers were making laptop batteries””pinkie-size cylinders, to be lined up and encased in the familiar plastic brick. The system is similar for batteries tiny enough for an iPod or big enough for a car. Conveyor belts carried long, wafer-thin strips of metal into printing-press-like rollers, which coated them with electrode-active material. Another machine sandwiched the strips between razor-thin layers of plastic, and wound the whole stack together into a tight “jelly roll,” a cylinder that looked, for the first time, like a battery. (Square cell-phone batteries are just jelly rolls squashed.)

A slogan on the wall declared “Variation Is the Biggest Enemy of Quality.” Gow nodded at it gravely. A bundle of batteries is only as good as its weakest cell; if a coating is five-millionths of a metre too thin or too thick, a car could be a lemon. The new plant will have up to three thousand workers on ten-hour shifts, twenty hours a day. “When you get down to it, you can have ten people working in China for the cost of one person in the U.S.,” Mark Atkeson, the head of Coda’s China operations, said.

It was easy to see China’s edge in the operation. Upstairs, Gow and Atkeson showed me America’s edge: their prototype of the pack. For two years, Coda’s engineers in California and their collaborators around the world have worked on making it as light and powerful as possible””a life of “optimizing millimetres,” as Gow put it. The result was a long, shallow aluminum case, measured to fit between the axles and jam-packed with seven hundred and twenty-eight rectangular cells, topped with a fibreglass case. It carried its own air-conditioning system, to prevent batteries from getting too cold or too hot. Rattling off arcane points, Gow caught himself. “There’s hundreds of things that go into it, so there’s hundreds of details,” he said. “It’s really a great field for people with O.C.D.”

Czinger, in that sense, had found his niche. By November, he was crisscrossing the Pacific, leading design teams on both sides; in the months since we first met, he had grown only more evangelical in his belief that, if Americans would stop feeling threatened by China’s progress on clean technology, they might glimpse their own strengths. Only his American engineers, he said, had the garage-innovation culture to spend “eighteen hours a day for two years to develop a new technology.” But only in China had he discovered “the will to spend on infrastructure, and to do it at high speed.” The result, he said, was a “state-of-the-art battery facility that was, two years ago, an empty field!”

So Americans invent the stuff and the Chinese make it. Thanks for the friggin’ “glimpse” of our strength weakness, our inability to elect leaders who would stop the Chinese and the rest of the world from eating our lunch — a lunch that we ever-so-thoughtfully designed for them!

33 Responses to Green Giant: Beijings crash program for clean energy.

Damn it Joe, I just get caught up and yet another post to comment on.
The trick of buying all renewable power is so important. China, as I have pointed out on other comments, has just signed a contract with another US invention. Cyclone Power Technologies. (no affiliations) This is a waste heat engine that could take under-brush, trash, whatever and clean burn to power a generator. Even a tractor. Lots of stuff. Invented here built there.

Many conservatives and libertarians cringe at the idea of having a national industrial policy for clean energy. I would point out that many of the industries where the US remains competitive have benefitted from massive government support at one point or another. Think biotech, pharmaceuticals, computers (especially the early years). Not to mention the defense industry.

It’s perfectly normal for the government to give a hand to nascent industries when there is a strategic interest in doing so. Commercial space launch is an example of an industry that might not even exist (at least at the current scale) without governments taking the early development risks.

Yes, industrial policies can backire, but the key is how they are designed. And NOT having a policy can also backfire, especially when your economic rivals start eating your lunch.

The law requiring grid operators to buy all the energy produced is how communism works. Where is the motive to become more efficient? I also know the Chinese high paying jobs are what, 1 dollar per hour?

Thought #1
I’ve been wondering why big oil companies don’t get into the renewable energy market, why don’t they diversify? Wouldn’t this help their long term profits? Then as I was reading No Logo by Naomi Klein I think I might have figured out why the oil and coal companies won’t diversify.

These oil and coal companies have branded themselves as oil and gas, they have spent millions of dollars denying anthropogenic global warming and they have powerful lobbyists and thousands of employees. Diversifying might mean admitting that anthropogenic global warming is occuring and that we need to do something about it, and in so admitting their stock values plummit – they no longer become the company they have branded as oil or coal. Their brand image must change. (Although I can only see their brand as improving, it can’t be any worse than today.)

Can you see in the future, wind farms with Shell painted on the outside, or Exxon solar panels, or BP geothermal plants? Maybe it’s already happening?

Thought #2
Why do we have to wait until China manufactures all these solar panels and wind turbines? Only when China starts to make this, does the price come down? But we are externalizing the true cost because they are manufacturing these things using coal and cheap labour.

China increasing it’s production of renewable energy means that all this new solar panels and windmills will be manufactured using coal energy. But I suppose the more renewables come online, the less coal is burned to manufacture solar panels and windmills.

Joe, here in Canada not only has Ontario had a similar policy requiring grid operators to purchase all the electricity produced by renewable energy generators for some time now, Ontario’s “standard offer” also requires them to pay a premium price for that energy in order to cover their investment in new plant and equipment.

I like the word “sustainable.” How do they dehydrate the wood for pellets, haul the pellets and compress them. I have a friend that shut down his wood pellet subsidiary after 10 years. It was losing money and his other divisions were not. I think pellets are a great idea. If you like dirty smoke.

Playing the “survival card” lief? As a psychologist, it won’t work. I am not as stupid as you are. The greenie weenies that claim all their fetishes will influence Human survival are getting laughed out of the room.

Bio-energy with carbon capture and storage (BECCS) is a greenhouse gas mitigation technology which produces negative carbon emissions by combining biomass use with carbon capture and storage.[1] It was pointed out in the IPCC Fourth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) as a key technology for reaching low carbon dioxide atmospheric concentration targets.[2] The negative emissions that can be produced by BECCS has been estimated by the Royal Society to be equivalent to a 50 to 150 ppm decrease in global atmospheric carbon dioxide concentrations.[3]

If done worldwide and universally, BECCS could put something like 6 billion tons of carbon per year back underground, operating at a profit, simultaneously generating electricity for electric vehicles, and preventing decay of methane producing organic material, aiding in wildfire prevention by clearing out forests, and displacing fossil fuel use.

If we allow the huge private capitalist structure to persist, it will simply continue acting in the selfish interest of its stockholders, and not for the common good.

So, we need to seize the productive capacity of the country, track down all the wealth that has been generated from despoiling the planet, seize that, and use the wealth and industrial capacity we have to solve this problem.

The capitalists could have adapted to this problem, instead they have made themselves enemies of mankind, and of present and future generations.

If ExxonMobil was a country, it would have the sixth largest carbon emissions of any country on earth. Nothing this big and this irresponsible can be allowed to exist.

Seize the wealth, seize the industrial capacity, and transform it to put carbon back underground.

[JR: They aren’t “green” — that was the New Yorker‘s headline, perhaps should have been caveated, but I have been pretty blunt about China’s immoral and unsustainable coal/climate policy here — but then again, neither are we. They are however planning to kick our butt on clean energy. The Lynas piece is mostly accurate, but I don’t agree with his conclusions.]

Joe – Regarding your comment that “Such legislation is not how we do business,” I don’t understand. How is the Chinese approach fundamentally different from policies such as California’s 33 percent Renewables Portfolio Standard?

Regarding your comment that “The only way to win the clean energy race is to pass the clean energy bill,” how is the federal bill fundamentally different from China’s approach? Federal climate/clean-energy legislation could be very effective if it is constructed to support an amplify sectoral and local policies — which it might, by the time is gets finalized. But the pending cap-and-trade legislation does the opposite. It is constructed to neutralize and nullify the environmental benefit of complementary policies (California’s RPS, EPA’s regulation of vehicle emissions, etc.) by ensuring that any emission reductions resulting from such programs are balanced by equivalent emission increases elsewhere. Do you think this is the best or only way that federal policy can be made to work in a democracy?

Joe, I admire your optimism. Whenever I feel down about the prospects for fighting climate change, I know I can come here for some perspective. However, I have to disagree about the cap and trade bill being “bipartisan”. Right now it is, but if the health care reform struggle has taught us anything, it’s that political pressure will eventually force moderate Republicans like Lindsay Graham to oppose any Dem legislation. If cap and trade passes at all — and right now I think the odds are against it, especially when the Senate is so dysfunctional — it’ll be a straight party vote.

BTW, did I miss your take on Copenhagen, especially in light of the Lynas report on China’s intransigence?

[JR: The bill will be bipartisan or it won’t pass. My Cope take is up here.]

The amendments to China’s Renewable Energy Law have been mischaracterized by the press. The Law in its orginal 2005 (effective 2006) version required China’s two grid companies to purchase all electricity generated from renewable sources. If anything, the new amendments make the process more cumbersome, and some believe they have added provisions that will make it easier for the grids to refuse to accept renewably-generated power. See http://www.chinaenvironmentallaw.com/2009/12/28/chinas-renewable-energy-law-amendments/.

It’s questionable how much Solar (photovoltaics) Energy China has any intention of installing domestically. However, China certainly has gone have the silicon PV export market in a big way. If you’re a USA company in the PV business – other than First Solar – will you be able to compete against the Chinese companies?

So where does that leave any engineers or scientists considering careers in alternative energy technology? Will China pretty crush all foreign (USA) competition – leaving few if any alternative energy technology jobs available in the USA?

This is how US manufacturing competes with cheap labor markets. Minimize labor, maximize the use of technology. No, it doesn’t create a lot of in country jobs, but it does create a few well paying ones for highly skilled people.

Herm Salmon, # 13: For starters to dry the wood I would use sunny weather. I would also start with under story brush that in all likely hood will be burned in a forest fire at some point anyway. I would use a Cyclone engine and burn said dried wood to make electricity on site if out source cable was available. Around homes or farms. Or I would use Cyclone engine to haul wood waste to central burn area. All with controlled burning as opposed to forest fire. Or I would use fuel to power farm and if extra sell to neighbor. Removing under story would improve the quality of the remaining timber and increase value as carbon sink, big trees far better than small trees. Also minimize fire danger. As for getting laughed out of the room; Time will tell…

Herm Salmin #4:
Saying that make a law that obligues the power distributors to buy all the renewable energy capacity “is how Communism works” is absurd.

Communism is ,by definition, a CLASSLESS and STATELESS system. Nothing like this exist in China, actually such a system did’t exist at all in all human history (exluding the Palaeolitic).

What we have had a lot of governments formed by political parties that called themselves “Communist”. But that is just a name.
No State could be Communist, because such a thing is an oxymoron (think:”Stateless State”) as would be a “Republican Kingdom”.

Leaving abstract social systems,and returning back to the ground, the so-called “Communist” governments claim to have build something more concrete: a SOCIALIST State.
Such a state would be a TRANSITIONAL phase between Capitalism and Communism, characterized by a series of socio-economical transformations that will eliminate the social differences and injustices. Reached that point, the Government will dissolve and a Communist Society will began.

The harsh reality is that not a single government in human history has done something similar to that. The so much quoted Soviet Union government done QUITE THE OPPOSITE to anything similar to Socialism. A Socialist System would mean that workers own the means of production (factories, mines, roads,railways, agricultural land) and distribute the profit equally among themselves.
Instead, that means of production were owned by the State and administrated by corrupt, abusive bureaucrats that followed the Plans dictated from above (i.e. the megalomaniac plans of J. Stalin & company), without any cornern about the environment or the well-being of the workers.

Same situation (or even worse) in Maoist China. In Modern China, the means of production were privatized but still must follow the Plans of the Government.

I hope to have settled all that nonsense about “Socialist-Communist CO2 reduction Plans”. A Central State planned economy is just State Capitalism (think of the State as a Giant Corporation).

We must note that the Chinese example, is really an example of WHAT NOT TO DO. They have a coal-powered economy that made them the biggest polluter in the world. Now they pretend to grow at 10% GDP a year, a rate that could not be realistically reached by the rate of New Clean Energy generation.
Things such as change all the State-owned power plant facilities to BECCS, or made energy self-sufficient towns and buildings based on Solar and Wind power are not in the vision of the Chinese Planners.

In the other arcticle about the Copenhaguen “Agreement” I have listed some measures I think that the Obama administration should take.

I agree with Bob Wallace (#21) that manufacturing should have as little input as possible: labor, materials, energy, etc. That is what makes renewables cheap and what displaces coal. I’d also like to see installation developed to have a lot of mechanical/robotic assistance. The good thing about renewables and jobs is that they create jobs now when we need them but if they don’t cut energy sector employment in half in the long run, they won’t be living up to their promise. Low cost energy is a huge employment multiplier and that is what renewables will provide as their main economic benefit (aside from avoiding climate disaster).

While we should hope to minimize energy sector employment over the long run, we should target coal mining areas for manufacturing jobs so that the mines can be shut down more smoothly. We should offer four tax free years for silicon refining or solar cell fabrication plants that can steal 95% of the workers at a Massey or Peabody mine. We should be clogging up the rail roads that carry coal now with silicon and solar panels so that the coal can’t be delivered. This is a key reason to have domestic manufacturing.

Chris Dudley, #24: The easiest way to cut unemployment is to half the hours of the work week. The first problem with that concept is health insurance. Universal Health coverage – Fixed. Money to pay for Health care? Carbon tax. Money to pay expenses for lost work time? First more time at home will significantly lower home expenses. Free time means more home cooked meals, garden, less day care, healthier family, improved personal health, lower transportation costs, do it your self home improvements, the list goes on. Rising energy costs because of carbon tax? Offset with home sustainable energy systems and ability to sell to grid, power personal transportation, cash cow. Money for said power source. Micro loans backed by Gov?
One thing for sure is that the status quo will change no matter what. What will the future hold? Right now it looks crappy from my view point, however I continue to believe that rational self government is a do-able option in spite of almost universal evidence against it.

Joe wrote: “… the conservative movement … has actively worked to thwart or gut efforts by progressives to maintain or increase clean energy funding … the anti-science ideologues …”

They are not “conservatives” and they are not “ideologues”. They are bought-and-paid-for shills for entrenched wealth and power, in this case for the fossil fuel corporations, spouting the fake, phony, trumped-up, focus-group-tested, Madison Avenue scripted, pseudo-ideology that is called “conservatism” in America today.

That fake, phony, ExxonMobil-funded “pseudo-conservativism” has as little to do with any actual ideology, whether conservative, libertarian or otherwise, as the fake, phony ExxonMobil-funded pseudo-science of the global warming deniers has to do with any actual science. They are both the same: deceit in the service of greed.

There is no “ideological” reason to obstruct and delay and oppose a transition from fossil fuels to clean renewable energy — there is only a financial reason, namely the massive transfer of wealth from the fossil fuel industry to other sectors of the economy, which the warlords of the fossil fuel corporations want to obstruct and delay for as long as possible.

Every single DAY of delay means hundreds of millions of dollars in profit for the fossil fuel corporations. That’s what their so-called “conservatism” is all about.

#2: More money to make it work? #25
Remove personal income tax and tax energy in general and pollution in particular. Also tax on international finance. There is no justifiable reason that it should cost people money to move across boarders and finance can move for free. People will always be holding the short end of the stick. Abolish the world debt as a one time hit for “stacking the deck” against humanity. The world common currency is a given amount of SUSTAINABLE energy. Polluting energy is well taxed to cover national debt. The GOP should even like it because deficit spending would be impossible.

By eliminating the international debt we all get to start on a level playing field. With a common currency. And most importantly vanquishing a common enemy of our own construction. And apparently the only passable road available is sustainability. By eliminating debt we erase backbreaking interests on oppressed people the world over. We could put the whole Internal Revenue Service on the public dole. Just imagine the whole IRS learning to grow flowers, live sustainable, learning to appreciate the finer things in life! We could maybe even be friends. The imagination runs amok!

We simplify book keeping by single production point collection and all social services are paid for by energy use and pollution. That is the cost of ENERGY. We one up the GOP by eliminating personal income tax and installing a flat tax. They got to love it. It is in there genes. If nothing else it should give them the heby-jeby’s. To facilitate the transition Factory production focuses on producing only stuff that meets highest achievable sustainability. If the two biggest threats to humanity are consumption and population an often overlooked solution is filling our lives with quality, cherished heirlooms. Not the constant importing of crap that needs to be thrown away and then replaced yet again. A person could save enough to put a site-specific sustainable energy source on his property and have a cash cow. No property? No problem .. Finance one somewhere else. Get a check. Lots of jobs!!! Low paying but what the hell, you have no debt and no insurance costs and no taxes. If you sell more energy than you need buy food. If you use more than you make, get a job.

The Information Technology & Innovation Foundation recently released a report with a comprehensive comparison of Asian vs. U.S. competitiveness in the clean-tech sector, including an analysis of the most recently enacted and proposed clean-tech policies. It concludes that the American Clean Energy & Security Act is not enough to regain U.S. competitiveness in this sector, and that it must include larger direct public investment in clean technology development, deployment, and manufacturing: http://www.itif.org/index.php?id=315

I thought this bit of the New Yorker article was telling, and extremely sad.

Begin quote – In announcing the opening of ARPA-E, in April, Obama vowed to return America’s investment in research and development to a level not seen since the space race. “The nation that leads the world in twenty-first-century clean energy will be the nation that leads in the twenty-first-century global economy,” he said. “I believe America can and must be that nation.”

An uninspiring version of that message is gaining currency in Congress; it frames American leadership as manifesting not so much the courage to seize the initiative as the determination to prevent others from doing so. Senator Charles Schumer, one of several lawmakers who have begun to cast China’s role in environmental technology as a threat to American jobs, has warned the Obama Administration not to provide stimulus funds to a wind farm in Texas, because many of the turbines would be made in China. (“We should not be giving China a head start in this race at our own country’s expense,” Schumer said in a statement.) Senators John Kerry and Lindsey Graham, in an Op-Ed in the Times, vowed not to “surrender our marketplace to countries that do not accept environmental standards,” and suggested a “border tax” on clean-energy technology.

The larger fact, however, is that no single nation is likely to dominate the clean-energy economy. – end quote
—
On algae, think of survivors. While it seems exciting when you first look at it (eats poisons for breakfast), it is much better at adapting and taking over than we are. In the end, it is likely to be a Pandora’s box.

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